How Crucial Music eliminated paper checks & automated royalty payouts
Crucial Music pitches its catalog of independent artists to sync opportunities in film, tv, and ads. Using Trolley, Crucial Music turned its payments from “check is in the mail” to a fully online process: sending royalty payments, automating tax recording, and providing artists ongoing, real-time transparency into payments.
Music is vital for setting a film’s tone. Music supervisors license music for sync—or music set to images—to underline the film’s tone. The artists who create that music are passionate, but the logistics of tracking royalty payments they’re owed is often lacking.
The team at Crucial Music, an online music licensing catalog for independent artists worldwide, are working to change that flaw.
"With thousands of payees worldwide, staying compliant with the IRS’s 1099 and 1042 regulations was time-consuming.
Trolley makes this and sending payouts easy, and allows us to spend more time on our core business."
Artists submit their music directly through Crucial Music’s website. Once the music is in the catalog, Crucial works with music supervisors and music editors to place the music in films, TV, and advertisements. Musicians retain full ownership of their music and Crucial provides full transparency into their pitch activity, placements, and royalties.
Sync licensing is a unique model with complex payout needs and Crucial Music prides itself on providing top dollar to its artists and ongoing insights into placements and royalties. But the payment process wasn’t always so easy.
Artists need insight into placement of their works and what they’re owed. This is complicated with royalties as there may be no payments one month and a flurry of payments the next. Prior to 2013, Patel and her team produced this manually.
From launch in 2006 to 2013, each artist’s placements and amounts owed were tracked in a spreadsheet. Every month, they sent each artist a copy with their physical check. Not only was this time-consuming for Patel, but it also meant artists couldn’t track their account in real time.
In 2013, Crucial built an online royalty system where artists could review placements and download their statements at any time (which eventually would allow for a seamless integration of Trolley in 2019).
“Our artists upload their music online, it only makes sense they get paid online, too. That seamless online experience shows we are a forward-thinking, technology-based business that values its artists.”
Once Crucial Music started working with international artists, Patel introduced PayPal for international payments. “It could be very painful. Our account was frequently locked and I had to get on the phone every time we made payments. We started paying quarterly per our agreement terms instead of monthly because it got so unmanageable,” Patel recalls.
It took Patel and Joy Stringer, VP of A&R at Crucial Music, two painstaking days a month to verify records, write checks, use PayPal, confirm addresses, and track tax records.
Trolley also manages W-8/W-9 form collection so labels can link the details of each payment and consolidate royalties for each specific artist. From there, Trolley automates the production and distribution of 1099 and 1042-S forms.
It was music to Patel’s ears. “I really wasn’t aware that there was such a thing. Had Trolley not approached me, I probably would have kept doing what I was doing.”
Now, Crucial’s artists provide their information through the Trolley widget and track past and upcoming payments through the portal. Plus, automated emails keep them connected to Crucial, adding up to a huge experience improvement.
New artists get an automated email to provide banking or PayPal information through the Trolley widget. Once onboarded, artists can log in to see a full dashboard of their payments for the year and the status of upcoming payments.
“What I gained from the Trolley process is the tax forms, foreign tax withholding, and tax reporting. And we don’t have to worry about storing bank information or follow up with checks that bounced, got lost, weren’t cashed, or were returned,” Patel says.
“Trolley gives our artists flexibility and payment transparency. With that knowledge, they always know when they will get paid. This lightened our customer service lift, since artists had all the information in one place.”
“Our investment in Trolley was absolutely worthwhile,” Patel affirms. “It simplifies tax recording, the payment process, and it provides our artists with transparency into their payments, keeping our customer service lift low. It upped our game and doing everything electronically demonstrates that we are professional and forward-thinking.”
“Once we spoke to the Trolley tech team, I knew it couldn’t backfire. We jumped on board and haven’t looked back.”
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